Valuing the Economic Consequences of Work Injury and Illness: A Comparison of Methods and Findings

Abstract

BACKGROUND Workplace injuries and fatalities in the US create significant economic costs to society. Although economic costs should measure the opportunity cost to society arising from injuries and fatalities, estimating them often proves difficult as a practical matter. This leads to a range of estimates for valuing these costs. METHODS This paper compares methods of economic valuation, focusing in particular on how different methods diverge to varying degrees from measuring the "true" economic costs of injuries and illnesses. In so doing, it surveys the literature that has arisen in the past 25 years to measure different aspects of economic consequences. RESULTS Estimates of the costs of injuries and fatalities tend to understate the true economic costs from a social welfare perspective, particularly in how they account for occupational fatalities and losses arising from work disabilities. CONCLUSION Although data availability often makes estimation of social welfare costs difficult, researchers should attempt to more fully integrate such approaches into estimation procedures and interpretation of their results.